Open Range Energy Corp.
TSX : ONR

Open Range Energy Corp.

February 28, 2011 18:06 ET

Open Range Energy Corp. Announces Expansion of Its Poseidon Concepts' Fleet, New Tank Model and Significant Long-Term Rental Commitments

CALGARY, ALBERTA--(Marketwire - Feb. 28, 2011) - Open Range Energy Corp. ("Open Range" or the "Company") (TSX:ONR) is pleased to announce that its wholly-owned business unit, Poseidon Concepts, has expanded its overall tank fleet to 65 systems from 45 at the end of January, has introduced an enlarged model of its modular, insulated fracturing fluid handling system and has received minimum commitments from four major oil and natural gas producers in western Canada and the United States.

The producing sector continues to respond to the performance and cost advantages of the innovative Poseidon system, which is supplied on a rental basis. The Poseidon fleet has been expanded from 25 systems entering 2011 to 65 as of February 28. This figure includes several of the enlarged "Atlantis" model tanks, which hold up to 41,000 barrels (6,500 m3) of fluids, more than double the capacity of the original "Poseidon" model, which holds 18,000 barrels (2,900 m3).

Fleet expansion is ongoing to meet increasing demand, which now includes minimum commitments over the next 12 months from four major U.S. and Canadian oil and natural gas companies. The commitments are commencing in the first quarter of 2011 and are expected to generate combined minimum revenue of approximately $18 million over the next 12 months. Poseidon believes these long-term commitments are indicative of overall industry demand and substantiate its plans for further aggressive fleet expansion.

The commitments are additional evidence of the strong operating environment for well completions services and related equipment in Canada and the U.S., particularly for unconventional oil and liquids-rich natural gas reservoirs being developed with horizontal wells and multiple hydraulic fractures. By reducing transportation, operating and heating costs and saving time at the well site, the Poseidon systems are contributing to the industry's drive for greater capital efficiencies in bringing new reserves on-production.

Poseidon continues to expand its footprint in the United States, with approximately 25 percent of the growing fleet expected to be operating in the U.S. by mid-March. Poseidon is beginning to expand beyond its current presence in the Bakken oil shale play of North Dakota, in order to begin servicing some of the larger fracturing operations underway at multiple unconventional oil and natural gas basins throughout the U.S.

Poseidon's cash flow from operations and EBITDA guidance for the six months ended June 30, 2011 has been increased to $9.5 million thanks to increasing demand, further fleet expansion and the recent long-term commitments received.

Reader Advisory

This news release contains certain forward-looking statements, which include assumptions with respect to (i) demand for Poseidon Concepts' tank systems and the corresponding utilization rate and operating margins; (ii) future capital expenditures and how they will be financed; (iii) cash flow from operations and EBITDA; and (iv) general oil and gas industry activity. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. All such forward-looking statements involve substantial known and unknown risks and uncertainties, certain of which are beyond Open Range's control. Such risks and uncertainties include, without limitation, risks associated with the manufacture and supply of fracturing fluid handling systems, marketing and transportation, loss of markets, volatility of commodity prices, currency and interest rate fluctuations, environmental risks, competition from other fluid handling system suppliers, inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada and the United States, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, as well as stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof. Open Range's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do, what benefits, including the amount of proceeds, Open Range will derive therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements, whether written or oral, attributable to Open Range or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Additional information on the foregoing risks and other factors that could affect Open Range's operations and financial results are included in the Company's annual information form and other reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and Open Range does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

THE TORONTO STOCK EXCHANGE HAS NEITHER APPROVED NOR DISAPPROVED OF THE INFORMATION CONTAINED HEREIN.

Contact Information

  • Open Range Energy Corp.
    A. Scott Dawson, P.Eng.
    President and Chief Executive Officer
    403-205-3704
    or
    Open Range Energy Corp.
    Lyle D. Michaluk, CA
    Vice President, Finance and Chief Financial Officer
    403-262-9280
    www.openrangeenergy.com